Trade War Widens

On the same day that he slapped 25 percent tariffs on all imported steel and aluminum, President Trump made clear he is turning his sights on the European Union as his next target. Mr. Trump told reporters that he is “of course” going to raise tariffs even more on the EU after Brussels announced it is retaliating against the US steel and aluminum tariffs.

Canada also announced retaliatory tariffs on US products, while other countries hit by the US tariffs were still hoping to negotiate exemptions.

At the same time, Mr. Trump denied that his tariff policy is creating economic uncertainty, saying that he is simply changing tactics in response to other countries’ action. He cited his decision not to impose 50 percent tariffs on steel and aluminum from Canada after Ontario backed down on imposing a surcharge on electricity exports to US northern states. “It’s called flexibility, it’s not called inconsistency,” he said.

Reciprocal Tariffs

The reciprocal tariff plan he intends to implement next month will be even simpler, he said. “Whatever they charge us, we're charging them. Nobody can complain about that. What it is, it doesn't even matter what it is. If they charge us, if they charge us 25% or 20% or 10% or 2% or 200%, then that's what we're charging them. And so I don't know why people get upset about that because there's nothing more fair than that.”

US Trade Representative Jamieson Greer blasted the EU for retaliating against the steel and aluminum tariffs, saying that Brussels failed to address the problem of global overcapacity. “The EU has rejected attempts under successive US administrations to cooperate effectively on dealing with global excess capacity on steel, aluminum, and other sectors, employing measures that are too little and too late,” he said in a statement.

“If the EU acted as quickly to address global excess capacity as it does to punish the United States, we likely would be in a different situation today. The EU’s punitive action completely disregards the national security imperatives of the United States – and indeed international security – and is yet another indicator that the EU’s trade and economic policies are out of step with reality.”